It is a little recognized problem in the retail industry that various invisible forms of larceny cost the retail industry billions of dollars in lost revenue and profits every year. These invisible forms of larceny means are undetectable by security cameras, security devices, store detectives or store employees. Invisible forms of larceny can occur in a variety of ways. Unscrupulous customers and store employees utilize these invisible forms of larceny to cause a retailer to siphon revenues and profits for personal gain. The problem is then compounded by dishonest employees who either steal company merchandise or give it away to friends and/or relatives with the intent to profit by re-sale or return to a retail outlet for cash or credit.
An individual typically can obtain fraudulent cash refunds and/or credits from a retail outlet via return transactions of fraudulent or invalid merchandise. The cost of countless man-hours each retail outlet expends processing superfluous fraudulent return transactions will cost the retail industry additional loses of revenue and profit each year. Such fraudulent return transactions occur by means of authentic merchandise purchased from a retail outlet, after which, the merchandise is returned back to a retail outlet by means of; retail price tag deliberately changed or altered, stolen merchandise, previously worn, knowingly invalid and returned by means of customers intentionally not providing a proof of purchase receipt.
Retail outlets that accept returned merchandise from customers without a proof of purchase receipt are vulnerable to lose revenue or cash for inventory returned that was never purchased from their retail location and/or retail chain. In fact, this activity has become more prevalent (largely in effect throughout the holiday shopping seasons) since there is no means for retailers to ascertain the location of purchase, type or purchase, or date of purchase. Additionally, the authenticity of a retailer's physical inventory is compromised through such activity.
The tight labor market of recent times has created a combination of factors that have lead to higher dollar losses each year, and is on the rise throughout the entire retail industry. Record labor shortages and cutbacks leave retailers short-staffed, thereby producing opportunities for thieves to steal from them.
The state of the economy, compounded by ever more sophisticated forms of larceny, have resulted in the increasing problem of retail inventory shrinkage and profit losses. In fact, according to the latest research inventory shrinkage remains the single largest category of larceny in the United States, more than motor vehicle theft, bank robbery and household burglary combined. Retail theft is a problem that affects all consumers. The cost of consumer goods necessarily must be continuously increased to offset the losses to retailers that occur due to such fraud and theft.
When a customer returns an item to a retail outlet, it is currently nearly impossible for the retailer to ascertain whether the item was truly purchased from that retail outlet. In fact, it is nearly impossible to tell for sure whether the returned item is truly valid or whether the returned item is a counterfeit or knockoff, etc. Countless varieties of fraudulent return transactions occur daily resulting to devaluation of the inventory at the retailer as well as cause degradation of the consumer's opinion of the quality of goods to be purchased.
Garments and garment accessories are highly susceptible to these invisible forms of larceny, especially given the current trends of designer clothing deliberately made to appear as though it has been pre-washed, pre-worn, old, aged and/or matured. A typical scenario involves a person who purchases a designer garment from a major department store for $100.00. The person then goes to a discount department store, outlet mall or Internet and purchases a similar designer garment for $20.00. The person then switches the major department store retail price tag from the $100.00 garment to the $20.00 garment and then returns the lower value ($20.00) garment to the major department store for a cash refund. This same person could also purchase that same $100.00 garment, switch the retail price tag onto something old and/or used from their private inventory at home and then return the garment back to the major department store and receive a cash refund. Additionally, a person could purchase a garment on sale/clearance or deviously purchase a garment that is ticketed with a retail price tag of “NO EXCHANGE and/or NO REFUND” because of an imperfection or blemish. The person then changes the price tag with a much higher price tag and then returns the garment either to the original retail outlet of purchase or returns the item to another retail outlet and receives a cash refund or credit. A person could likewise purchase an expensive garment from a retail outlet, wear it out on the town, wash or dry-cleaned it (or maybe not) and then return the garment back to the retail outlet and receive a cash refund. A person could also purchase an authentic product from a retail outlet, change the retail price tags onto counterfeit goods, return the counterfeit goods and receive a cash refund. The retailer's inventory now contains counterfeit goods, and subsequent purchasers that become aware of this situation will be very dissatisfied at that retailer. Not only is the retailer's inventory devalued, furthermore, a dissatisfied consumer's experience of this problem and/or word of mouth to other consumers could likely lead to the retailers lost of business in the long term.
Several security methods exist in the prior art that address various forms of retail larceny. U.S. Pat. No. 4,799,045 by Fearon et al. teaches of a magnetized tag designed to thwart shoplifting of items from retail outlets. U.S. Pat No. 5,762,377 by Chamberlain defines a method for authenticating items through the use of non-removable markings, such as holograms. Begelfer et a. teach of tags with holograms in U.S. Pat. No. 6,547,137 that identify each retail item. None of these methods, however, addresses the problems associated with fraudulent returns and refunds as described above.
Current security devices cannot detect these invisible forms of fraud and larceny. Thus, a need exists to address the limitations of the current state of the art in the field. Specifically, a need exists for a system that reduces and/or eliminates the losses associated with the return of merchandise that was obtained and returned in accordance with the fraudulent schemes outlined above.